ED's Blog by The Godfather of Biodiesel in the Northeast

Federal Officials with the Department of Health and Human Services are putting forth new regulations on Hospitals, Urgent Care Facilities, and other inpatient care environments that would require them to have plans on maintaining necessary functions for patient health and safety. This includes new regulation on emergency backup generators and generator fueling. According to the AHA this means they must "develop and maintain and comprehensive emergency preparedness program that...utilizes an all-hazards approach...developing capacities and capabilities critical to preparedness for a full spectrum of emergencies or disasters.. not managing seperate planning initiatives for a multitude of threat scenarios"

HHS cited severe issues that had arisen during Hurricane Katrina, Hurricane Sandy, and other disaster scenarios, (including the estimated 215 hospital patients who died in Katrina's aftermath) and declared that comprehensive emergency preparedness plans are an "Urgent Public Health Issue" (You can read more about this in today's New York Times article here: http://nyti.ms/1fndiuP )

One of the more controversial federal requirements is that each emergency generator must be tested annually, for at least four hours under a full load (based on what the estimated power needs of the facility would be in the event of an emergency need). A written record of inspections, testing, and repairs is required to accompany the new testing requirements as well. The old regulation only required such testing every 3 years. The thought is that there are oftentimes issues with generator performance when the need strikes, and proper testing and maintenance annually will go a long way in preventing those failures going forward.

Additionally, hospitals that maintain an on site fuel source for their generators must maintain a quantity of fuel on hand that would be capable of sustaining through the emergency, or until likely resupply could occur. After all - your generator isnt of any use if you run out of fuel.

The controversy about these parts of the regulation is cost, obviously. The American Hospital Association estimates first year costs at $225 million dollars, according to the New York Times. However, NYU Langone Medical Center alone reported over a billion dollars in damages and lost revenue in the wake of Hurricane Sandy - so it would seem big picture, that a lack of willingness to pay upfront costs could be "penny wise but pound foolish" in the event of a disaster.

What are your thoughts on the new proposed regulations?

(By the way - if you're in the healthcare industry and would like a detailed explanation of the proposed outlines and how they specifically need to be implemented in hospital settings, the ACA has an excellent slideshow online at www.aha.org )

This week a Federal Judge ruled that New England utility companies guaranteed profit rates are too high at their current rate of 11.1% and advised they be dropped to 9.7%. According to boston.com, this is projected to save electricity customers in Massachusetts approximately 50 million dollars a year (out of 115 million for New England as a whole).

However, utilities argue that these levels of return are necessary to make transmission improvements to avoid issues like those we experienced in New England in 2011. It was only about 2 years ago that Massachusetts and the New England region suffered huge, extended power outages from a couple brutal storms. Additionally after Hurricane Sandy and events like it, we all seem to agree that there’s improvements needed in electric transmission and supply – and in fairness, utilities have projected huge spending on these projects in the coming years.

An important point to remember also is the monumental, round the clock work utilities put in in emergencies like Sandy, tirelessly working to restore power to impacted areas. Our work in Emergency Fueling & Response has let us see that first hand and let me assure you, these people are unbelievably great in times of crisis. In theory these transmission upgrades should mean that in times of crisis, the outages will be a lot more manageable which should be a positive for just about everyone.

The Edison Energy Group, according to Boston.com has stated that investor-owned utilities will spend over 26 Billion on transmission improvement projects in2014 & 2015, and Massachusetts alone is expected to see 67 million dollars in improvements by 2017. That’s a pretty impressive level of investment and utilities argue those dollars come from their ability to project profit levels based on the guaranteed rates in question.

On the flip side however, Massachusetts has some of the highest electrical rates in the country, along with Connecticut and other New England States. According to the US Energy Information Administration. You can see the chart of rates here: EIA.gov

Additionally, one of the regions’ major utility parent companies reported earnings 33% higher than in 2012. The year before that saw some controversy over bonuses paid out to utility executives, which seems to have been what spurned the case for lowered rates started two years ago by Massachusetts Attorney General Martha Coakley’s office.

Massachusetts consumers won’t see too much of an impact on their personal home bills, but businesses could benefit greatly from lowered costs. However, is there a potentially disastrous cost in the future without the transmission updates utilities say can only occur at the higher percentages?

What do you think?

Is this a good ruling or one that may seem “penny wise and pound foolish” in the event of another major storm impacting the area?